October 19, 1998|
(Japan Federation of Economic Organizations)
In the light of the conditions in today's stock market, an organization (tentatively named the Organization for Securities Market Revitalization) to help revitalize the market by promoting the dissolution of cross-shareholding and facilitating the cancellation of shares shall be created.
The organization shall be established as a public organization temporarily for about five years.
The organization shall catalyse the exchange and cancellation of cross-held shares.
The exchange and cancellation of cross-held shares through the organization involve no cash transfer. The transactions between the company and the organization to be settled by netting of receivables and payables.
Cash-flow for the purchase of cross-held shares will not be necessary.
Special tax measures shall be taken for capital gains and for cancellation the shares through the organization.
Necessary Commercial-Code measures shall be taken to allow the purchase of own shares directly from the organization and to suspend rights to vote and claim dividends for shares kept by the organization.
Any necessary accounting measures shall be taken for such matters as the receivables from the organization.
In addition, as another way of avoiding negative affect due to the dissolution of cross-shareholdings, a company shall be allowed to contribute its corporate pension fund by shares, only when a fund management institution intend to keep those shares in their fund's portfolio. In addition, special tax measures on the capital gains at the time of such contributions shall be taken.